MOSL: CEMENT-Prices largely flattish; Hikes likely in south markets

​CEMENT: Prices largely flattish; Hikes likely in south markets

Cement prices declined marginally by 1% MoM in the first half of November 2017 due to price weakness in the south market.

Prices in south are likely to be hiked by INR15-20/bag next week to compensate for the correction over the last three months.

Prices in north are likely to be flattish until mid-December due to reduced construction activity in the NCR region (as per NGT ruling) and the sand mining ban in Rajasthan.

Cement demand for October was healthy in north, with growth coming from the IHB segment. Demand in south declined by ~1% YoY due to weakness in Tamil Nadu, partly offset by strong demand from AP/Telangana.

Cement prices correct marginally at all-India average level

All-India cement prices were marginally lower by 1% MoM for the first half of November due to a 3% MoM price correction in south, driven by lower prices in AP/Telangana. Cement prices in north/west/east/central were largely flattish MoM, with selected regions like Mumbai and Ahmadabad witnessing price volatility in the first week of November.

Prices likely to be increased in south

Cement prices in south have declined by 3% MoM in November (down 13% from the peak in April 2017) due to demand weakness. Our channel checks suggest that cement prices are likely to be increased by INR15-20/bag in AP/Telangana and by INR5-10/bag in Karnataka. However, prices in Tamil Nadu may remain unchanged, with monsoon keeping demand muted.